Council tax dodgers cost us all Â£50 a year

Local authorities in London have lost more than £1 billion because of council tax dodgers.

New figures show the extent of a decade of inefficiency and illegal evasion of the tax.

Since it was introduced in 1993, more than £1.3billion has gone unpaid across the capital's 33 boroughs.

Law-abiding residents have been paying nearly £50 extra a year to compensate for people who refuse to pay, or who slip through the net as a result of council incompetence.

The figures follow Mayor Ken Livingstone's call for his share of London's council tax bills to be increased by 12 per cent next year to help tackle crime and terrorism.

Lambeth is shown to be the worst for the amount of lost revenue. It has failed to collect more than £132million - money that should have been used to improve services in one of most deprived boroughs.

Other poor performers include Hackney, Haringey and Southwark, all of which also have high levels of deprivation.

Excluding the Corporation of London, which has few residents, even good performers such as Sutton lost more than £11 million. Simon Hughes, Liberal Democrat candidate for London Mayor, obtained the figures in Parliamentary answers from Deputy Prime Minister John Prescott's department.

Mr Hughes said they show the tax is "unfair and inefficient".

He added: "Millions of pounds do not get collected, often leaving the poorest households and poorest boroughs to foot the bill. Those who pay, pay more, or have their services cut instead."

He said he would pressurise ministers to replace council tax with a local income tax, should he become Mayor next June. This would be cheaper to collect and take account of people's ability to pay, he claimed. "Scrapping the council tax would save hundreds of millions in bureaucracy, stop people cheating the system and allow money to be returned to hard-pressed taxpayers," he added.

The Conservatives have joined the Lib-Dems in attacking the Government over prospective council tax rises, following Chancellor Gordon Brown's pre-Budget report last week.

They point to hidden statistics in the statement, which they say show that the Government expects council tax bills to rise by 8.2 per cent next year - four-and-a-half times more than inflation.

Tory shadow local government minister David Curry said: "This is a shocking £1.5 billion hit on council tax payers."

The anticipated rise is in spite of an extra £340 million promised by the Chancellor for councils in England to ease spending pressures and help keep bills down. This year's bills rose by an average 12.9 per cent, but by as much as 45 per cent in boroughs such as Wandsworth, meaning the typical bill in London broke the £1,000 barrier.

The Government has threatened to cap councils that set unreasonably high rises next year in an attempt to prevent double-figure percentage increases. Lambeth defended its record, saying collection rates have improved dramatically-since it was taken over by a Lib-Dem and Tory joint administration in May last year.

Ashley Lumsden, Lib-Dem executive member for finance, said: "Ever since council tax was introduced, some people in Lambeth have not paid a penny. It's not because they can't afford to, it's because the council was never serious about collecting the money."

He said a hardline approach now involves court action against nonpayers. Dozens of residents have been made bankrupt and one has even lost his Clapham home to cover unpaid bills and fines of more than £20,000.